Credit issuers face new rules at NJ colleges: No more T-shirts

You remember college. Late night, Vivaran-fueled study sessions. Laying out in the Quad. Hazing rituals. Writing illegible essays in the blue books. And the ubiquitous credit card companies, turning poor college students into modern-day consumers – and all the trappings that came with it. Pizza, clothes, and, of course, debt.

The New Jersey Division of Consumer Affairs this morning sent word that it has alerted colleges and universities to a new state law that requires credit card issuers to register with the institution before selling their wares to students.

Once on campus, they are required to essentially explain what students are getting into: When the introductory interest rate ends, what the new interest rate will be; how interest is computed; and how long it would take to pay off the balance if they only make minimum payments. Card issuers also no longer can offer promotional products – mugs, key chains, T-shirts – as an incentive to buy.

When I checked around a couple of years ago for a possible story on the practice, none of the local colleges allowed card issuers on campus anyway, So I never wrote the story; I’m not sure how big an impact this law will have.

The other side to this is that college students can build up a strong credit score by getting a credit card with a modest limit and paying it off each month.

But the recession at its heart was caused by consumers taking on too much debt. How that happened is a matter of debate. Some think consumers didn’t pay attention. Others think lenders pulled a fast one by using fine print so small and so convoluted that consumers needed a magnifying glass and a law degree.

It stands to reason that the post-recession world is going to include a lot of regulations that require clear explanations of how debt works. It is going to be up to consumers to take a stand and not sign up for anything they don’t completely understand.